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Wednesday, August 28, 2013

Family Lore Clinic: I have a charge on my house from a court order, does my exes mortage company have a 2nd charge?

It is a common arrangement in a divorce settlement that the former matrimonial home is transferred to one party, with the other party being given a charge over the property for their share, the charge not being enforceable until some future date, for example when the children have finished their education.

Obviously, the party to whom the property is transferred may still have had to take out a mortgage on the property, for example to pay off any mortgage that was already existing on the property prior to the transfer. How does that mortgage work with the charge given to the other party?

The answer is that the mortgage company will probably not have a second charge, it will have a first charge. This means that their charge will rank first in priority to the other party's charge, so that if the property were sold, their charge would be paid off first.

If there is sufficient equity in the property to cover both charges, then having a second charge is not necessarily a problem. However, if the equity is not sufficient, then the person with the second charge may find that if the property is sold (for example because the owning party defaults on the mortgage), there is not enough money left from the sale proceeds to pay their charge.

As usual, if you require more detailed or specific advice regarding this matter, you should consult a specialist family lawyer.

5 comments:

His this common now a days they go for the kids and then move in on your property...

greedy solicitors stealing money, bill of costs over the top.many people have been reporting fraud, Plymouth is up to it neck in fraud. freemason and corrupt solicitors aided and abetted by certain judges.

solicitors and clients come to court with out any evidence, send out miss information

The second charge should included a term under which no further charge can be taken out without the consent of the second chargee, probably the ex-husband. And why? So that if the wife runs into trouble with her finances and cannot pay the mortgage (but there is enough equity to pay both on a sale) and the first chargee wants a sale the ex gets a chance to see his money earlier than otherwise he might.

John, of course the authorities of whom Mr Anonymous are corrupt. They are part of the Conspiracy. I thought everyone knew that.

Husband should also require the wife to instruct the first chargee irrevocably to let him know if there is any default or late payment. Of course if the husband remains liable on the first charge, which he commonly does, he does not need her to do so; he simply tells the chargee where he is living and he will be entitled to be told.)

He should try for a term that two late payments, in successive months or not, will trigger the right to a sale or to payment (which will usually amount to the same thing) in the same way as remarriage. If she fails to keep up the first mortgage arrears will accrue and interest on interest, and he should be able to take over and sell; he has more interest in getting a good price than the first chargee does. If the wife seriously intends to keep up the payments and will be able to do so, she will not object; if she does object she probably does not so intend or will not be so able or both.

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Nothing in this blog should be construed as legal advice. If you require legal advice upon any family law related matter then you should consult a solicitor. Any links to other blogs or web sites are provided for convenience only and I cannot accept any responsibility for the contents of such linked blogs/sites.